How to Become a Distributor of Multiple Financial Products ?
- AssetPlus
- Aug 11, 2023
- 8 min read
Updated: Mar 6
Are you aspiring to build your career in the financial sector?
How to increase expertise in the financial sector?
How to earn more as a financial expert?
How to become a distributor of multiple financial products?
If these are some questions that you often keep thinking about, this article is written just for you.
Dive in now and find all the answers you want. The financial industry has evolved rapidly over the years, just like medicine and engineering.
As the financial needs and demands of people are constantly changing and increasing, the introduction of various financial products that can cater to different needs has become like oxygen in the air. Highlight:
Benefits of Becoming a Financial Product Distributor
1. Multiple Revenue Streams 📌 Earn commissions from various financial products (mutual funds, insurance, FDs, etc.).
2. Flexible Work Model 📌 You can operate as an independent distributor or partner with a financial firm.
3. High Growth Potential 📌 The demand for financial advisors is growing in Tier 2 and Tier 3 cities.
Step-by-Step Guide to Becoming a Financial Product Distributor
1. Get the Required Licenses & Certifications 📌 Mutual Fund Distributors: Get AMFI Registration Number (ARN) 📌 Insurance Agents: Obtain an IRDA License 📌 Stock Market Products: Register with SEBI/NSE/BSE
2. Partner with Financial Institutions 📌 Tie up with AMCs (Asset Management Companies), Insurance Firms, and Banks.
3. Set Up a Digital & Offline Presence 📌 Create a professional website and list yourself on Google My Business. 📌 Use social media (LinkedIn, Instagram, YouTube) for marketing.
4. Educate Clients & Build Trust 📌 Conduct webinars, WhatsApp sessions, and in-person seminars.
5. Use Technology for Growth 📌 Leverage mutual fund platforms and CRM tools for smooth operations.
What are some common or popular financial products that you can instantly name?
Here’s a list to help you:
Stocks, - Bonds,
Mutual Funds, - Real estate,
Fixed Deposits, - Insurance,
Retirement & Tax-saving products like NPS, PPF - Loans
Gaining mastery over some or all of these products can help you become a financial expert.
But what more does it offer?
You can create a promising career path for yourself.
Become a registered distributor of multiple financial products and services.
Maximise your income opportunities and build your own business.
Create a competitive advantage with knowledge of multiple financial products
Guide people in their financial planning journey with diversified solutions.
Become a trusted financial icon and inspire many others in this field.
That said, are you ready to become a distributor of multiple financial products?
In this guide, we will walk you through a comprehensive checklist that helps you become a successful distributor of multiple financial products.
Relevant Education & Qualification.
Legal Obligations.
Establishing a Strong Distribution Network.
Sales & Client Acquisition Strategies.
Expanding Business and Staying Abreast of Regulations.
RELEVANT EDUCATION & QUALIFICATION (including training & certification)
The first and foremost requirement to comply with for becoming a distributor is obtaining the relevant qualification. For instance, to distribute mutual funds, you have to appear for the NISM series V-A exams and qualify as a Mutual Fund Distributor. Similarly, you must write the NISM series X-A to become an Independent Financial Advisor, or NISM Series XXI-A for qualifying the PMS Distributors Certification Examination etc.
Obtaining the relevant certification is a necessary and fundamental parameter. It is essential to undergo proper and relevant training to build experience and expertise in a practical environment. The regulatory bodies of different financial products like RBI, IRDAI, SEBI, AMFI, etc, conduct training programs to develop the business instincts and working expertise of professionals in the respective domain.
LEGAL OBLIGATIONS (obtaining necessary licenses, registration of business, regulation & compliance requirements, etc)
The next step after obtaining necessary qualifications is to apply ffor licenses required in order to begin your distributor business. For instance, if you want to become a distributor of Insurance products - you must get license from IRDAI. It is important to understand that for obtaining a license, one needs fulfill any criteria set by various regulatory bodies. In our case of distributing Insurance, you can get the license to deal in insurance products only if you meet the conditions prescribed by IRDAI.
After obtaining the relevant license(s), you have to register your business as a legal entity with a proper name, place of business (address) & contact details. There are various ways by which you can set up your entity, such as a sole proprietorship or partnership or company. However, if you wish to start a partnership or company, then you must comply with the guidelines for incorporation of business as set out by respective statutes like The Partnership Act, 1932 or the Companies Act, 2013. You can also seek professional guidance while setting up your business in order to comply with the regulatory requirements.
ESTABLISHING STRONG DISTRIBUTION NETWORK (including business infrastructure, empanelment or partnering with entities)
Once you have completed the process of setting up and registering your business, it is time to develop necessary infrastructure. This involves constructing a physical premise, establishing virtual presence through a good website & software, employing human resources, etc., all of which are required for smooth running of your business operations.
In distribution business, one other requirement is partnering or empanelling with companies to distribute their products. For example, if you are planning to distribute Mutual Funds then it's necessary that you empanel yourself with at least one Asset Management Company (AMC). The same rule applies for distributing Insurance and other financial products like Corporate FDs, loans and bonds.
For distributors like you, the new trend is FinTech Companies that use an aggregator-type model. They build ties with companies providing multiple financial products and by aligning with these firms, you can distribute a wide range of products without needing to undergo separate empanelments for each item from different businesses.
SALES & CLIENT ACQUISITION STRATEGIES (include marketing, sales, trust building & client base)
Now that you know how to become a distributor of financial products, let us guide you with strategies to market and sell these products, acquire more clients, build trust and establish your brand identity.
The most important criteria to achieve success in your distribution business is expanding your client base and increasing the AUM you handle. Here is one important fact that you must always remember: Out of 10 prospects you talk to, only 3 or 4 become your clients. And on an average, if you spend around 30 mins to 1 hour talking to one prospect, this consumes a significant amount of your time and energy.
Therefore, it is vital to note that as a distributor, your foremost focus must be to set a target market, approach each prospect in the target and move them down through your business funnel. Effective communication is a vital skill to build more clients.
And the process continues - once you have a new client, implies that you have gained their confidence. The next step is to earn their loyalty and foster a long term relationship. To achieve this, understand what they anticipate & need. Assist them in attaining their goals through tailored advice and suitable financial alternatives. This boosts your identity as a brand and establishes a strong business presence.
As discussed earlier, we at AssetPlus provide platform services to partner and distribute multiple financial products. Additionally, you also get an array of other services essential to grow your business including, technology, operational assistance, marketing support, client acquisition strategies as well as research and business development training among others.
With all other things taken care by us, all you need to do is focus your sales, expang your client base and continue to offer uncompromised financial guidance.
EXPANDING BUSINESS (include training & BD, network, upskilling, etc)
As a successful multi-product financial distributor, it is vital to continuously upskill yourself. Participate in training programs conducted by regulatory bodies, industry associations, and FinTech platforms and keep yourself updated on changing regulations, market trends, and innovative strategies.
Networking is another essential aspect of business growth. Attend industry conferences, seminars, and workshops to connect with fellow professionals, learn from their experiences, and foster potential collaborations. Building a strong network not only enriches your knowledge but can also open doors to valuable partnerships and referrals.
As the financial landscape evolves, so should your business strategies. Embrace innovative technology solutions to streamline operations, manage client relationships efficiently, and offer personalized services. By committing to a culture of constant learning, strategic networking, and adopting cutting-edge tools, you can position your multi-product financial distribution business for sustained success and growth.
Conclusion:
To conclude, setting out towards the path of becoming a distributor of multiple financial products is an interesting journey albeit a big responsibility. By developing keen interest and deep understanding of various financial products, complying with rules and regulations, building trusting connections with clients, and continuously improving your skillsets will enable you to establish a successful position in this opportunistic field.
Keep in mind that although it may seem difficult at first, seeking advice from established professionals and industry experts can be highly beneficial in navigating the complexities and achieving sustainable growth. As you walk along this way, your efforts add not just to your personal financial and career growth but also to the financial health of those people and enterprises that you assist.
FREQUENTLY ASKED QUESTIONS (FAQs)
What qualifications are needed to become a distributor of financial products?
To become a distributor, you need to obtain relevant certifications such as NISM Series V-A for mutual funds, and other specific exams for different financial products.
What are the benefits of distributing multiple financial products?
Distributing multiple products can maximize your income opportunities, help you build a business, and enable you to offer diversified financial solutions to clients.
Are there any technological requirements for becoming a successful distributor?
Yes, having a strong online presence, good software for managing client relationships, and keeping up with FinTech trends are essential.
What are the tips to become a successful distributor of financial products?
Focus on acquiring clients, build trust, provide personalized advice, continuously upskill, and stay updated with industry trends and regulations.
What are some common financial products?
Stocks, bonds, mutual funds, real estate, fixed deposits, insurance, and tax-saving products like NPS and PPF are common financial products.
What legal steps must be taken to become a financial product distributor?
Obtain necessary licenses, register your business as a legal entity, and comply with regulations set by bodies like RBI, IRDAI, SEBI, and AMFI.
How do I establish a strong distribution network?
Build a business infrastructure, create a physical and online presence, hire staff, and partner with companies to distribute their financial products.
What strategies can help me acquire clients?
Focus on marketing, building trust, setting a target market, and providing personalized financial advice to foster long-term client relationships.
Why is networking important in financial distribution?
Networking helps you learn from others, foster collaborations, and gain referrals, which can enhance your business growth.
Who can join as a distributor in AssetPlus?
Any individual, who has completed the NISM V-A MFD Certification Examination and has a valid ARN can join AssetPlus and start distributing multiple financial products.
What kind of financial products are available in AssetPlus?
AssetPlus offers wide range of financial products including Mutual Funds, Health insurance, Term insurance, Loan Against Mutual Funds, National pension System, Corporate Fixed Deposits, Portfolio Management Services, etc.
What support does AssetPlus offer to financial distributors?
AssetPlus provides platform services, technology, operational assistance, marketing support, client acquisition strategies, and business development training.
More Sources to Read:
